Doug Casey predicts the "biggest economic smashup in history." Perhaps, he might do something that Ravi Batra never could, which was make a correct prediction.

http://www.worldnetdaily.com/news/ar...TICLE_ID=26082

I'm not totally sure whether we are in the beginnings of the next great recessionary period, or whether we are in a temporary recession which will lead to a recovery which will last until about 2009-2011, but I know that much has been discussed about this by Mike Alexander and others. Mike talked about the K-wave cycle and noted how some economists have the timing wrong. The are a lot of theroists who say that we are in the midpoint of a long boom cycle which should end in about 2020, while others, particularly Harry Dent, who believes that we will be booming economically until about 2008 or 2009, at which point we will enter another great recessionary period which will last until 2020 through 2025.

I was tempted to believe last summer just before September 11th that we had already entered the beginning of the next great recessionary period, but I'm beginning to reconsider at this time. After all, the demise of speculative public companies (i.e. dot-coms) shouldn't be a strong enough catalyst to warrant major economic catastrophe. Enron and K-mart are somewhat better indicators, but K-mart as an institution has been weak for at least 20 years, and Enron was using fradulent accounting to hide debts that they probably would have been able to recover from had they been honest to shareholders. I believe that we are really heading into ecomonic crisis once very famous brand-name institutions bite the dust (IBM? Sears? US Steel? Lockheed-Martin?). I'm not implying that all of these companies are in trouble (though U.S. Steel is clearly in a declining market, and Sears is in a severely competitive retail maket and at a great disadvantage to companies like Wal-Mart, Home Depot, Best Buy, etc.), but I know that part of the K-wave theory states that there is a rush by the largest companies to stake out the biggest market share, and those companies which cannot lead their markets, come up a close second or third, or serve a unique niche market, will ultimately be cast aside.

Or as Nelly would say, "Two is not a winner, and three nobody remembers."

The Magic Cookie Jar

Once upon a time, long before the Sad Happenings, the Magic Cookie Jar was where people put all of their savings. The Magic Cookie Jar was magic because when people put something special into the Jar, something else appeared in their lives just as special, yet they new not what it would be until after they put their savings into the Jar. And this is how life worked. Everyone would put all of their savings into the jar and all of their needs were taken care of--after all, what appeared was always something super-special and was exactly what they needed at any given moment. All was well, especially when they got chocolate chip cookies in return!

One day though, a group of people decided that they wanted to make their own cookie jar, because, they reasoned, they could make it work even better. With their cookie jar they would know exactly what they were going to get out of it before they put their savings into it. What a cool idea, they thought.

So before long, the new cookie jar became known as bartering or trading and eventually they called it a bank. They even had to lock it up, because some people decided to just open the lid and take what was not theirs. In time, it became known as the Federal Reserve System! Only now, the cookie jar had become invisible, but only because the savings had become numbers, rather than anything special. The other funny thing about this new cookie jar was that it never really worked quite right. Even though, it would grow sometimes, sometimes it would become small and there wouldn't be enough for all of the people who had put cookies into the cookie jar. This cookie jar was fickle. And because it had become invisible, one day it would simply disappear.

Now since so many years had passes since people knew about the Magic Cookie Jar, few believed it to exist. But it did. All they had to do to use it was to put something into it and to not expect anything specific in return. They simply had to believe that they would receive their special gifts. But it had been so long since they knew the Magic Cookie Jar that they did not trust it. So many many people still wasted their savings in the faulty, fickle Reserve.

If you're wondering where to find the Magic Cookie Jar, well, it's all around you. Just open your eyes and your heart and put something into it. Be patient and see if something special is waiting for you in return.


<font size=-1>[ This Message was edited by: Dave'71 on 2002-01-22 00:20 ]</font>

Dave, that's brilliant! Did you think of that yourself?

No, I am being sincere, not sarcastic.

That is a great parable.

Fron the progressive Nation of 4 February 2002, Mr. Wm. Greider opines There are more Enrons Out There; The Rot is Systemic via FreeRepublic. HTH

Financial crisis? My small business'(lodging and tourist related) gross is down 20% for 2001. Know alot of other independents who are feeling the pain (sorry Mr. Lamb) too. You just live on credit cards and hope for the best.

Goodbye K-Mart!!

http://www.washingtonpost.com/wp-dyn...2002Jan22.html

Dang it. I tried to save them. I shopped there twice over the weekend. But it was no use. :smile:

Kiff '61

K-mart filed chapter 11, not 7. Macy's filed for chapter 11 in 1989. Federated Department stores took them over and as a Macy's bondholder I got stock and warrants for Federated stock. Eventually the stock and warrants became worth as much as the bonds I bought and I got my money back. Macy's shareholders were of course wiped out. But many of the stores still exist and many of the employees kept their jobs.

I suspect something similar will happen to K-mart.

<font size=-1>[ This Message was edited by: Mike Alexander '59 on 2002-01-22 12:45 ]</font>

http://money.cnn.com/2002/01/22/retirement/401k_reform/

Retirement looms ever closer for the Boomers.

Did Larouche predict the collapse of the New Economy?

http://www.larouchepub.com/lar/2002/2903trip_curve.html

One more article from Larouche:

http://www.larouchepub.com/other/200..._3curv_us.html

On 2002-01-23 08:55, madscientist wrote:
Did Larouche predict the collapse of the New Economy?

http://www.larouchepub.com/lar/2002/2903trip_curve.html

This man LaRouche is a crank and an economic illiertate to boot. I would never listen to this man in a million years.

Relax you think 5% unemployment levels are bad, you never been to Europe or Australia. In Australia for example we had a decade of strong economic growth and the offical unemployment rate is just under 7%, the real unemployment rate is probably around 13%.

A good measure of actual employment levels is the percentage of working age people (15-64) with jobs. In the USA the level is around 76-78% of the working age population, in Australia it is around 70% and in most of Europe it hovers around the mid 60's.

In conculsion Americia's de-regulated job market and tight welfare rules, has kept unemployment in a year of bad economic conditions to levels we would envy in Australia, with our generous welfare system and regulated job market.

On 2002-01-23 15:14, Tristan Jones wrote:

On 2002-01-23 08:55, madscientist wrote:
Did Larouche predict the collapse of the New Economy?

http://www.larouchepub.com/lar/2002/2903trip_curve.html

This man LaRouche is a crank and an economic illiertate to boot. I would never listen to this man in a million years.

True, but it makes for interesting reading.

Mr. Gary Dempsey and Mr. Aaron Lukas make the case for an Afghan Free Trade Pact in the 23 January 2002 number of the Washington Times.


One does wonder what the present Tariff rate is on dust? Perhaps this is a theological impulse rather than a money matter. An Heroin Tax might bring more reward. HTH

<font size=-1>[ This Message was edited by: Virgil K. Saari on 2002-01-23 20:41 ]</font>

Subject: Enron and Derivatives

Dr. Marty Weiss has a pretty good article over at the Strategic Investment website on Enron's involvement in the derivatives markets and its implications for other companies:

http://www.dailyreckoning.com./pfrie...fm?id=1643&x=h

On 2002-01-23 15:14, Tristan Jones wrote:

On 2002-01-23 08:55, madscientist wrote:
Did Larouche predict the collapse of the New Economy?

http://www.larouchepub.com/lar/2002/2903trip_curve.html

This man LaRouche is a crank and an economic illiertate to boot. I would never listen to this man in a million years.

AND

One man's terrorist
is another man's freedom fighter.

Are you a sophist?

Will the Enron scandal deepen the Crisis mood?

http://www.commondreams.org/views02/0129-04.htm

<font color="blue">
The Great Divide
by Paul Krugman

It was a shocking event. With incredible speed, our perception of the world and of ourselves changed. It seemed that before we had lived in a kind of blind innocence, with no sense of the real dangers that lurked. Now we had experienced a rude awakening, which changed everything.
No, I'm not talking about Sept. 11; I'm talking about the Enron scandal.

One of the great clich?s of the last few months was that Sept. 11 changed everything. I never believed that. An event changes everything only if it changes the way you see yourself. And the terrorist attack couldn't do that, because we were victims rather than perpetrators. Sept. 11 told us a lot about Wahhabism, but not much about Americanism.

The Enron scandal, on the other hand, clearly was about us. It told us things about ourselves that we probably should have known, but had managed not to see. I predict that in the years ahead Enron, not Sept. 11, will come to be seen as the greater turning point in U.S. society.

Quite a few people have belittled the significance of the Enron affair ? not just Treasury Secretary Paul O'Neill, with his unfortunate remark about how "companies come and companies go," but commentators who don't think a failed business is that much of a story. Think of it this way: The business of most Americans is business, and Enron already ranks as one of the biggest business scandals in history. There have been other big, admired companies that failed; there have been other companies that turned out to be largely fraudulent. But I can't think of another case in which the most admired company turned out to be a fraud.

So even if the story turns out just to be about Enron, it has been an object lesson in how appearances can deceive. And I don't think this is just a story about one company.

Before Enron collapsed, the economic story of the last few years seemed more of a comedy than a tragedy. Yes, many people lost money, but they did so because they were foolish ? they bought stock because they believed New Age economic drivel, or because they thought William Shatner made great ads.

Now the story looks vastly darker. People didn't deceive themselves; they were deceived.

It's true that Enron got a lot of mileage out of the same kind of new- economy jargon that fed the dot-com bubble ? for example, former C.E.O. Jeffrey Skilling liked to say that the company was "virtually integrated."

But despite the high-tech veneer, the structure appeared solid: Enron wasn't a profitless dot-com, run by crazy kids. It seemed to be a company with a proven track record. Its executives seemed to be smart but solid, personable men. It seemed to be a company with a great work ethos, a sense of mutual loyalty. Then it came apart at the seems.

So now what? At the moment, demands for reform are scattershot and confused. Some people want new rules for 401(k) plans; some want new rules for accountants; some want campaign finance reform; some want a return to regulation. These seem like unrelated agendas, but I think they have a common theme: They're all about ending an era of laxity, in which nobody asked hard questions as long as everything looked O.K. That era is now over.

The political speculation right now focuses on who will take the blame for what happened. I admit it: that's a very interesting question. But I suspect that for those who are not directly implicated ? and most politicians won't be ? what will matter is not what they did but what they do. Do they act as if they get it ? that they understand that the old laxity is no longer acceptable?

Clearly, Dick Cheney doesn't get it: He thinks, after all that has happened, that we should just trust his assurance that energy companies did not distort his energy plan. Clearly, Harvey Pitt, chairman of the Securities and Exchange Commission, doesn't get it: I don't pretend to understand the institutional issues in accounting reform, but everyone I know who does regards his supposed reform plan as ludicrous. Clearly, Marc Racicot doesn't get it: He thinks that we should just trust him when he says that he won't lobby as chairman of the Republican National Committee, even though his former lobbying firm will pay his salary.

Does Tom Daschle get it? Will George W. Bush get it? The answers to those questions may well decide their, and the country's, political future. Enron, I predict, will turn out to have changed everything. </font>

Mr. Krugman was on the pundit payoff list, perhaps he's miffed.

Krugman is one of Bastiat's "Broken Window"-type economists. I tend to take the views of establishment tools with a grain of salt.

Subject: Just a Boy

The Fed meets tomorrow. Greenspan says he is done with his cuts. I beg to differ. The Dow dropped off 250 points today and the Japanese market is down 150 as I write this.
The traders aren't happy. They're dumping anything which even MIGHT have questionable accounting in its Yearly Report. This will not be good for the Stock Market and the Market is now the US economy. It used to just reflect the economy. But now the Net Capitalization of the Market is about 150% of GDP. It IS the economy. People are depending on it for a living just like back in '29. So if the Powers That Be tell Al to cut, cut he will. He's just a boy. He says the recession is over. How would he know? He didn't see it coming, he believed his own New Economy hype. How does he know it's over? NOBODY knows. We're ALL just guessing.

<font size=-1>[ This Message was edited by: Robert on 2002-01-29 19:51 ]</font>

Some comic relief.

The difference between Capitalism, Communism, & Enronism.

Capitalism: You have two cows. You sell one & buy a bull. Your herd multiplies & the economy grows. You sell them & retire on the income.

Communism: You have two cows. Your neighbors help take care of them & you all share the milk.

Enron-ism: You have two cows. You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so you get all four cows back, with a tax exemption for five cows. The milk rights of the six cows are transferred via an intermediary to a Cayman Island company secretly owned by the majority shareholder, who sells the rights to all seven cows back to your listed company. The annual report says the company owns eight cows, with an option for one more.

....then one of your cows gets mad cow disease and your ability to deliver contracted milk from the other 8 evaporates as your creditors stake claims on the last remaining cow that has been eating and drinking from the same trough the infected cow was drinking from.

Of course the grain feed company that you have been paying to "feed and monitor" all nine cows indicates that nothing was wrong with your feed, but nonetheless he shreds all records of feed sales just as a precaution.

Mr. Saari: In a nutshell, I think you've got it.

We better hope that no other major company collapses. If this happens, then it is very likely that we will start to see the Great Devaluation.

http://quote.bloomberg.com/fgcgi.cgi...v_QRR4SW52ZXN0

<font color="blue">
Investors' `Enronitis' Roils Markets: U.S. Stocks Outlook
By Robert Dieterich

New York, Feb. 2 (Bloomberg) -- U.S. stock investors have been stricken by what William Rutherford calls ``Enronitis'' -- deepening skepticism of corporate America.

Rutherford, who oversees about $100 million as president of Rutherford Investment Management in Portland, Oregon, says the collapse of Enron Corp. sapped confidence that managements and their auditors are accurately portraying profits.

``All it took this week was just a hint or suspicion or maybe someone floating a rumor and the stocks got taken apart,'' he said. Investor concerns over accounting walloped General Electric Co., the biggest company by market value, and American International Group Inc., the largest insurer.

Ed Yardeni, chief investment strategist at Deutsche Banc Alex. Brown, cited doubts over accounting as he recommended shifting money to bonds from stocks. He cut equities to 70 percent of his model portfolio from 80 percent, boosting bonds to 30 percent from 20 percent, saying investors won't be willing to pay as much for stocks amid the new scrutiny.

Tyco International Ltd., which makes electronics and fire protection equipment, and Williams Cos., an energy trading and pipeline company, had their biggest weekly drop since the October 1987 stock market crash, the biggest decliners in the Enron- related rout. The Standard & Poor's 500 Index fell for the third week in four.

Losers

Tyco's 18 percent slide came after the company said it paid $20 million to a director and a charity he controls for help in an acquisition. That built on concern that the company hasn't provided enough information about how it makes its money.

Williams said it might be liable for $2.4 billion in costs related to Williams Communications Group Inc., the provider of fiber-optic network services that was spun off last year. Williams shares fell 23 percent.

PNC Financial Services Group fell 7 percent. The Pittsburgh- based bank scared investors by reducing 2001 net income by about $155 million because the Federal Reserve objected to the way it accounted for some bad loans it sold.

PNC created companies to buy its bad loans and resell them over time, and the insurer AIG participated in the transactions. AIG dropped 6.1 percent this week, though it said earnings won't be hurt by the PNC partnerships.

`Silly Season'

Tyco, GE and AIG were among the biggest drags on the Standard & Poor's 500 Index, which lost 1 percent this week. The Nasdaq Composite Index lost 1.4 percent. The Dow Jones Industrial Average rose 0.7 percent, helped by Procter & Gamble Co.

``It's been kind of a silly season here, with everybody suspect,'' said Rutherford.

Deutsche Bank's Yardeni said he cut his stock recommendation not just because of post-Enron concerns that managements might be deliberately misleading investors. He also cited ``practices like distinguishing between operating and reported earnings.''

Operating earnings can exclude expenses related to events such as mergers or job reductions that usually must be included when formal accounting rules are followed and earnings reported to the Securities & Exchange Commission.

``We've just had a heavy round of bamboozlement with the dot- coms anyway, and now we've been bamboozled again,'' with Enron, said Roy Smith, a professor of finance at New York University and former partner at Goldman, Sachs & Co. ``So we are all feeling a little sour on the stock market.''

Fed Decision

That skittishness was partly offset by optimism the economy is starting to recover and by signals this week from the Federal Reserve. The S&P 500 trades at about 60 times earnings, more than double its level in September, as investors anticipate a profit rebound.

On Wednesday, the Fed's Open Market Committee left interest rates unchanged -- after reducing rates 11 times last year to 1.75 percent -- signaling that policy makers have confidence a recovery is coming. ``Signs that weakness in demand is abating and economic activity is beginning to firm have become more prevalent,'' the Fed said in a statement.

Stocks rose on Wednesday and Thursday, helped by the Fed and by a report that the economy unexpectedly grew in the fourth quarter. Two new surveys also said consumer confidence rose more than expected in January.

Semiconductor stocks, which investors say are due to rebound ahead of the economy, climbed this week. Intel Corp., the biggest maker of computer microprocessors, added 2.9 percent, and the Philadelphia Semiconductor Index jumped 3.2 percent.

The semiconductor index gained 5.8 percent this year, even as the Nasdaq Composite Index fell 2 percent. The S&P 500 is down 2.3 percent this year; the Dow Jones Industrial Average is off 1.1 percent.

Procter & Gamble

Procter & Gamble, the largest household goods maker, gained 4.3 percent this week after saying sales rose in the quarter ended Dec. 31, the first time in more than a year. The company also said profit in the current quarter will beat forecasts.

Waste Management Inc., North America's largest trash hauler, fell 16 percent, one of the biggest declines in the S&P 500.

Cendant Corp., another company with an accounting scandal in its past, fell as much as 17 percent Tuesday and finished the week 10 percent lower. Analysts said the stock was falling because of growing concern that partnerships not on the company's balance sheet might contain unknown liabilities.

On Thursday Cendant tried to address these criticisms by putting more information about affiliated entities on its Web site. The company franchises Ramada Inn hotels and owns Avis rental car.

Earnings

Stocks have fallen as companies have reported their fourth- quarter results and updated forecasts for this year. Some investors have been disappointed that bellwether companies such as Intel have failed to say that they see sales rebounding.

Cisco Systems Inc., due to report its quarterly results on Wednesday, is one of the last large technology companies left to offer its comments.

With 70 percent of S&P 500 companies having already reported, profits fell about 24 percent in the fourth quarter, according to Thomson Financial/First Call. Analysts are forecasting that profits will drop 7.7 percent this quarter and then begin to climb after that.

Other companies that are scheduled to report earnings next week include energy companies such as AES Corp. and El Paso Corp., phone companies including Sprint Corp. and WorldCom Inc., and beverage makers Anheuser-Busch Cos. and PepsiCo Inc.

</font>